The International Monetary Fund on Thursday allowed Greece to bundle its four debt payments due this month into a single payment now due on June 30. A first installment of €300 million was due on Friday.

ADVERTISING

Talks that began on June 3 in Brussels between Greek Prime Minister Alexis Tsipras, European Commission chief Jean-Claude Juncker, Eurogroup chief Jeroen Dijsselbloem and other lenders wrapped up after midnight with all parties recognising progress was slow, and pledging to reconvene within days.

The International Monetary Fund (IMF), European Union (EU), and European Central Bank are pushing Greece to implement budget reforms before releasing 7.2 billion euros ($8.2 billion) in bailout funds that are critical to helping the country avoid default.

Debt-stricken Greece is facing 1.6 billion euros ($2.1 billion) in repayments to the IMF this month, raising fears it is headed for bankruptcy and a possible EU exit.

A first instalment of 300 million euros ($390 million) was due on Friday, before the IMF agreed to bundle them with three others previously scheduled for June 12, 16 and 19. While the move brought the negotiating parties a measure of relief, it does not guarantee that a final agreement will be finalised.

Earlier, Dijsselbloem declared differences were “still quite large” as he emerged from the meeting in Brussels, warning that Athens risked sinking talks if it refused to budge on reforms.

On the other hand, Greek authorities say they are unwilling to impose further belt-tightening in a country that has already been heavily punished by austerity measures in recent years.

“What we are hearing here is that there are demands to cut the lowest pensions and increase electricity prices,” said Nathalie Savaricas, FRANCE 24’s correspondent in Athens. “Tsipras has said this cannot happen in a country where austerity has essentially wiped out a quarter of its GDP and hugely increased poverty levels.”

“All the headlines this morning said that [creditors] are demanding blood money, or a blood tax,” Savaricas added.

There were nevertheless some signs of progress from the meeting, including agreements on Greece achieving low primary budget surpluses in the next two years. Dijsselbloem said lenders now expected Athens to quickly present alternatives to their proposals.

Threat of Syriza ‘rupture’

The failure to find an accord in Brussels threatens to deepen Greece’s economic woes, but botched negotiations could also spark a new political crisis in the small European nation, with senior members of the ruling Syriza party saying they refuse certain measures put on the table by creditors.

“If the government accepted this proposal, it would have been a disorderly retreat and an agreement to our submission,” Social Security Minister Dimitris Stratoulis told Parliament on Thursday.

Lawmakers from Syriza, the radical left party that won a historic vote in January, have threatened to call an early general election or a referendum if PM Tsipras is forced to accept a deal that crosses its “red lines”.

“The more left faction of the party says that if the government is presented with an agreement that is not acceptable, that goes contrary to the very essence of Syriza, then general elections are the only option,” FRANCE 24’s Savaricas said, adding that Tsipras appeared to be increasingly caught between “saving Greece with some agreement” and “rupture between his party”.

Meanwhile, European officials told reporters that a new meeting between Tsipras and creditors could take place as early as Friday. The AFP news agency cited two unnamed EU sources as saying that a next round of negotiations was “likely” on Friday, but that they would also be long and arduous.